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Maybe it’s just me, but I feel like the news services are becoming increasingly negative. Where I once enjoyed reading various news feeds while I had lunch, I am finding myself more disenchanted and depressed by the end of the meal. It feels like the outlets are thriving on how much worse off we are, and how something outside of our control is going to threaten our personal security, safety and wallet. I was recently sharing this with a client, and he agreed with my sentiments. He made a conscious decision to get off these media feeds and focus on the controllable positives, rather than the uncontrollable negatives.
If you read the news, especially with regards to independent distribution, Amazon is going to wipe us all off the face of the earth. They are going to be able to deliver products to your customers faster, cheaper and more profitable than an independent could ever imagine. If that is the case, why even try? I suspect it’s because deep in our heart, we really don’t buy the hype. Inside the soul of a successful distributor is a creative entrepreneur who wakes up each day looking to take on the challenge. Big is not something to be feared; instead, it is something to outmaneuver and overcome. Fortunately, the modern distributor has a tremendous arsenal with which to go to battle.
The access to advanced technology is amazing. When I started my career, distributors were lucky to have a mainframe, some dumb terminals, and a dot matrix printer. Today, even the smallest of distributors have access to incredible technology. Recently, a friend of mine who owns a seven-person distributorship asked me to help him set up an onsite inventory crib system with a large electrician. Through barcode technology, an iPad app, and some basic importing skills, the customer can scan items as they take them out of the conex box and relay the reduction of inventory back to the distributor for an order to be generated. For some industrial companies, this might seem like child’s play. To a small company in a remote high desert setting, this is a really big deal. It was a big deal for me too. Although this capability has been available for a long time, I can look at this change in business transaction with a sense of awe.
Speaking of barcode technology, I am most impressed with the advances in warehouse and point of sale applications. It is not necessarily the capabilities of these systems, as they have been around for almost two decades, but it is the affordability and accessibility that attracts me most. I have another client who has recently begun to implement their wireless warehouse application, which is going to revolutionize the way they process orders and manage inventory. Again, it is not new technology, but it is an exciting time for a distributor doing slightly over $10 million in revenue. This access to advanced technology will open doors for them.
The ability to access, filter and analyze data has never been more accessible than it is today. Software providers, both ERP and third-party offerings, are pushing to provide more robust and simpler ways to understand customer buying habits. They are offering better ways to view the management and procurement of inventory. Even the smallest of shops can capture and analyze data like the big kids on the block. Better data analysis helps these smaller players identify and exploit opportunities often overlooked by their larger competitors. Fortunately, the younger generations in our companies thrive on this analysis and can prove their worth in short order.
Love it or hate it, social media has become a huge influencer in our perception of the world around us. It can be used to spread positive and negative messages about our environment. Savvy companies have learned to use these platforms to drive brand awareness. Previously, we used traditional advertising, feet on the street and websites to project an image of strength. Today, the power of social media allows us to manipulate the perception of our company without costly investments in buildings, vehicles and brand representatives. Once again, the access to these campaigns is within the means of most smaller distributors.
Younger generations can help our companies take advantage of this powerful perceptional tool. Some of us may balk at their seemingly addicted relationship with social media platforms, consider it their training, education, and mastery of this new branding opportunity. Spend time considering what you want to say and then let these emerging branding experts provide the method of delivery.
Greater access to capital has been a driving force in this economy. For many distributors with healthy financials, banks are coming out the woodwork to offer lines of credit at reasonable rates. Although I suspect that this trend may be slowing, distributors are still able to expand their businesses at very attractive terms. I would agree that the banks are asking for a little more accountability, but that isn’t a bad thing. Lending like drunken sailors- no offense to my friends in the Navy- is what got us into the mess we experienced in 2008. Access to capital has allowed distributors to offer a more in-depth product mix, better access to new markets and further investments in technology. This translates to healthier profit margins for both the suppliers which distributors invest in and the customers they serve.
Furthermore, changes in tax laws have allowed distributors to invest in much-needed equipment upgrades. Many of my clients have been able to upgrade, and depreciate, their delivery vehicles and warehouse equipment faster than ever. These upgrades help serve customers more efficiently, and also provide a safer working environment for the employees.
As I alluded to earlier, our younger generations are uniquely poised to help us recognize the power of these new technological offerings; they are not jaded by the failures of our past. They enter the working world with the fascination and awe of real entrepreneurs. Now some may say that they lack the work ethic to be genuinely entrepreneurial, but I am not so sure. I see initiative when the environment is stimulating. I see collaboration when the challenge is complex. Ultimately, I see creativity and optimism when the world says they can’t do something. While some might view this as entitlement, I see it as a belief in self. Remove the barriers and let them perform.
Don’t let anyone tell you that independent distribution is over. I believe in the resiliency of the business in which I grew up. Small, privately held distributors are crazy optimists. In their heart, they believe they will win any battle. I agree. Today is a great day to be in distribution, regardless of what anyone tells you. Good luck, and I am always here to help.